Executive summary: the topics at the heart of the strategy

The journey towards “Net Zero” is under way worldwide and the processes of decarbonizing and electrifying the global economy are crucial in avoiding the grave consequences of temperatures rising by more than 1.5°C. Customers will play an active part in this process and will also be its main beneficiaries. The next decade will be key to achieving the targets outlined in the 2015 Paris Agreements and will involve increasing initiatives to foster electrification, through which customers will gradually convert their energy consumption to the use of electricity, thereby reaping benefits in terms of costs, efficiency, reduced emissions and price stability.

 

Towards 2030

The future decades will see a revolution in the energy world that will require unprecedented investments at a global level. Enel, thanks to its leadership in the sector, is perfectly positioned to capture the value arising from the acceleration of the energy transition, mobilizing its own investments and those of third parties for a total of 210 billion euros between now and 2030.

Around 160 billion euros will be invested directly by the Group through the traditional Ownership model, a further 10 billion through the Stewardship model, which catalyzes investments through joint ventures and partnerships to take full advantage of valuable expertise by offering services, and a further 40 billion euros mobilized via the latter model through third parties.

 

The growth of renewables

For 2030 the Group expects to reach an overall capacity from renewable sources of around 154 GW of installed capacity (tripling the capacity of the 2020 portfolio), with an increase of around 105 GW of capacity.

Thanks to its commitment to decarbonization, by the end of the decade the Group will have cut its direct CO2 emissions by 80% compared with 2017 levels, a goal certified by the Science-Based Targets initiative (SBTi) in line with the 1.5° scenario (which is the most challenging).

 

Infrastructure and networks: 86 million clients in 2030

The network’s customer base is expected to increase by 12 million by the end of 2030, reaching 86 million (compared with the current figure of 74 million). We will also promote the electrification of energy consumption and increase the volume of electricity sold by almost 30%. At the same time, we will concentrate on the development of new services, such as electric mobility or storage, also in collaboration with partners. The goal is to reinforce the Group’s position as a global operator in terms of size, quality, efficiency and resilience.

 

The customer at the center

An additional goal will be to increase customer value by raising the level of electrification of consumption and, at the same time, improving the services offered.

The Group will perform the role of enabler in the process of electrification, powering customers forwards on their journey towards sustainability and energy efficiency.

The increase in the volumes of electricity sold and the growth of "beyond commodity" services will be accompanied by a general reduction in costs. Specifically, the Group's commercial action is expected to lead to a reduction of up to 40% in customers' energy expenditure; at the same time, the electrification of consumption and the decarbonization of the energy mix will lead to a reduction of up to 80% in their carbon footprint1 by 2030.

 

Creating value along the entire chain

In line with the strategy that places the customer at the center, the Group is creating a new business line, Global Customers, which will be responsible for defining the commercial strategy and directing the allocation of capital towards customer requirements, leveraging electrification and, at the same time, achieving excellent levels of service.

The new strategy will focus on simplification, thanks to a greater emphasis on “Tier 1” countries (those in which Enel has an integrated, or potentially integrated presence: Italy, Spain, Romania, the United States, Brazil, Chile, Colombia and Peru). It will also focus on a continuous optimization of the risk-return profile through asset rotation activities aimed at disposing of assets that are no longer functional to the Group’s strategy, and, lastly, on operations of mergers and acquisitions aimed at improving the Group’s positioning, acquiring expertise and skills or generating synergies.

 

Bringing forward the “Net Zero” targets

The Group’s strategy and its positioning outlined for 2030 make it possible to bring forward by 10 years – from 2050 to 2040 – the commitment to achieving “Net Zero,” for both direct and indirect emissions, without requiring technologies for the removal of CO2 or nature-based solutions, such as tree-planting.

The Group is set to complete the phasing out of coal in power generation by 2027 worldwide and gas by 2040, substituting the thermoelectric portfolio with new renewable capacity, in addition to taking advantage of hybridizing renewables with energy storage systems. Moreover, it is expected that by 2040 the electricity sold will be produced entirely from renewable sources and, by the same year, the Group will withdraw from retail gas sales. 

 

The 2022-2024 plan

Over the next three years Enel will be positioned within the framework of targets set for 2030.

Direct investment of a total or around 45 billion euros is planned for the period 2022-2024, an increase of 12% with respect to the previous plan.

Over the three-year period the Group plans to invest around 43 billion euros through the Ownership business model, 94% aligned with the United Nations Sustainable Development Goals (SDGs).

During the same period an investment of around 2 billion euros will be made through the Stewardship business model, thanks to capital injections and minority shareholding acquisitions, mobilizing, at the same time, a further 8 billion euros of investment from third parties.

Of the Group’s total investments planned for 2022-2024, around 19 billion euros are forecast to be assigned to Renewables, mainly in countries where the Group benefits from an integrated business with the end customers.

The Group’s total renewable capacity is set to increase to 77 GW from an estimated 54 GW at the end of 2021. Consequently, in 2024 zero-emission production is forecast to reach 77% of the total and in the same period CO2 emissions are set to fall by 35% compared with 2021 levels, putting the Group well on track to reaching its Net Zero targets within the planned timeframes.

Around 18 billion euros will be allocated to Infrastructure and Networks, with an increase of 12% compared with the previous plan, primarily as a result of greater investments in Europe, which are set to leverage the opportunities created in National Recovery and Resilience Plans (NRRPs) launched in the EU.

 

Increased revenues and sales

Thanks to the new customer-centric model, integrated profits in “Tier 1” countries are expected to grow 1.6 times by 2024 compared with 2021. Over the coming three years revenues from customers are set to increase by 26% and sales of electricity by 25%. This will be accompanied by a reduction of around 15% in the overall cost of energy sold compared with 2021, which is also due to a reduction of around 23% in the average production cost of energy. The active management of assets will be used to complete the simplification process and deploy resources in order to seize further growth opportunities. These actions are expected to produce an increase in profits of 300 million euros when fully implemented.

 

EBITDA, profits and dividends

 Earnings growth
2021 E 2022 2023 2024
Ordinary EBITDA (€bn)
18.7-19.3 19.0-19.6 20.0-20.6 21.0-21.6
Net ordinary income (€bn)
5.4-5.6 5.6-5.8 6.1-6.3 6.7-6.9
Value creation
Fixed DPS (€/share)
0.38
0.40
0.43
0.43

At Group level, ordinary EBITDA is expected to grow by 12%, from between 18.7 and 19.3 billion euros estimated for 2021, to between 21 and 21.6 billion euros in 2024.

Ordinary net profits are expected to increase by more than 20% from between 5.4 and 5.6 billion euros estimated in 2021 to an overall value of between 6.7 and 6.9 billion euros in 2024.

The dividend policy for the period remains straightforward, predictable and interesting. Shareholders are due to receive a fixed dividend per share (DPS), which is expected to grow by 13% from 2021 to 2024, reaching 0.43 euros / share.

1 Reduction in energy spending and CO2 footprint calculated versus 2020 based on Enel’s portfolio of clients in Italy and Spain.

Documents

Strategic Plan 2022-2024

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Strategic Plan 2022-2024: Key figures

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